Operations Update and Funding Update

Frontera Resources Releases Operations Update and Funding Update

FRONTERA RESOURCES CORPORATION

("FRONTERA" OR THE "COMPANY")

Houston, Texas, U.S.A. - 31 December 2013

Frontera Resources Corporation (London Stock Exchange, AIM Market - Symbol: FRR), an independent oil and gas exploration and production company ("Frontera" or the "Company"), today released and operations update as well as a funding update.

Operations Update

Mtsare Khevi Gas Complex:

Following the update released on September 30, 2013, the Company has continued to make progress towards completing the installation of gas sales infrastructure in the Mtsare Khevi Field. Testing and final regulatory approval of the installed fourteen kilometer system will continue into January and is nearly complete ahead of commencing gas sales. The infrastructure will accommodate production from currently shut-in gas wells which the Company believes could produce from the outset approximately two million cubic feet per day of gas (57,000 cubic metres per day).

The Mtstare Khevi Field is situated within a larger play area of approximately 80 square kilometres referred to as the Mtsare Khevi Gas Complex and encompasses gas targets found between 300 metres and 5,000 metres in depth. Based on Frontera's internal estimates, analysis has revealed significant gas potential throughout this area of up to approximately 1.2 tcf of gas in place (28 billion cubic metres) and up to approximately 700 bcf of recoverable gas (19.8 billion cubic metres). During the first half of 2013, ongoing geologic studies related to existing well data associated with the Complex continue to provide support for defining the extent of the identified potential throughout the greater Mtsare Khevi Gas Complex. Gas production from the Mtsare Khevi Field will contribute to the assessment of the Complex's potential. Independent assessment will take place in 2014.

Taribani Field:

At the Taribani Field, operations continue to be focused on gathering technical information related to the field's main reservoir objectives. Workovers and stimulation of existing wells will continue into Q1 of 2014 to increase production from the field and provide important reservoir data for the Company's anticipated 4 well drilling campaign within the field.

The Company is continuing its negotiations with strategic financing partners for development of the Taribani Field prior to the commencement of operations on a 4 well campaign designed to continue exploitation of the field's main reservoir objectives, as well as other associated horizons situated within a potentially prospective 1,000 metre geologic column situated between 2,000 meters and 3,000 meters in depth. Subject to completion of ongoing discussions, operations are expected to commence during the first half of 2014.

When operations on the planned 4 well program commence, the Company will begin with the re-entry, sidetrack and frac-completion of the Niko #1 well. When the Niko #1 well was originally drilled and tested, it flowed at a peak rate of 960 bopd and produced 10,400 barrels during its 40 day production test. However, production was suspended as a result of a poor completion and failed packer. Today, reservoir performance modeling by Frontera from this planned operation predicts a "most-likely" case of approximately 1,000 bopd. In addition, Frontera plans to side track the T-#31 and T-#16 wells in order to apply frac-completions to Zones 14 and 15, as well as drill the new T-#46 well location with similar frac-completion in the same target zones. The Company believes that the three wells can achieve daily production rates of 300 bopd per well.

The Taribani Field Complex is an area that encompasses approximately 1,400 square kilometres and includes the discovered yet undeveloped Taribani, Kila Kupra, Bayda and Iori fields within Block 12. Internal preliminary analysis suggests that there could be as much as 18 billion barrels of oil in place throughout this complex. Ongoing work throughout the remainder of this year will continue to study and assess the viability of this analysis and larger scale development potential. Independent assessment of the Company's conclusions will take place in 2014.

The Taribani Field proper is a large oil accumulation with 788 million barrels original oil in place ("OOIP") independently assessed by Netherland, Sewell & Associates ("NSA") in 2005 for Zones 9, 14, 15 and 19. NSA assigns a 15% recovery factor giving "Technical Possible Reserves" of 118 million barrels for the field. An additional 36 million barrels are assessed as un-risked Prospective Resources in five deeper zones in the field.

Mirzaani Field:

At the Mirzaani Field, the Company has planned a 5 well drilling campaign with the intention of exploiting the undeveloped northwestern portion of the field, with individual wells each believed to be able to deliver approximately 100 bopd. As previously announced, the Company is in ongoing discussions with a potential strategic partner and it is anticipated that, subject to successful conclusion, commencement of work will now take place during the first half of 2014. In the meantime, a new workover and stimulation program is now planned in the field during the first half of 2014 in order to increase production and provide important reservoir data for the Company's anticipated drilling campaign.

The Mirzaani Field is located in the eastern portion of the Shallow Fields Production Unit amidst a complex of several existing oil fields. Discovered in 1932, the Mirzaani Field has historically produced oil from a small developed portion of the field but contains extensive undeveloped and underdeveloped areas. After acquiring approximately 100 kilometres of new 2D seismic data as part of an effort to re-map and identify new potential associated with the field, Frontera drilled the Mirzaani #1, #2 and #5 discovery and appraisal wells, which were the first wells to be drilled in the field since the Soviet-era.

In 2010, NSA assigned a "Best Estimate" for gross OOIP for the Mirzaani Field and Mirzaani northwest Extension of 541.7 million barrels, with a "low"-to-"high" range of 343.8-857.3 million barrels; and a "Best Estimate" for remaining recoverable gross contingent and unrisked prospective oil resources of 43.8 million barrels, with a "low"-to-"high" range of 20.5-86.1 million barrels. This assessment is consistent with Frontera's internal estimates.

Basin Edge Play Unit:

Technical analysis of Frontera's historical work relating to the Basin Edge "A", "B" and "C" prospects has continued this year. Studies have served to refine historical interpretations associated with each prospect and provide better understanding of potential reservoir targets related to the prospects associated with this exploration play. Additionally, discussions continue with a potential strategic partner in order to return to drilling operations at the "C" prospect. It is expected that drilling operations will resume during the first half of 2014.

The Basin Edge Play Unit is located along the northern border of Block 12 and represents what the Company believes to be one of the newest and potentially most prolific exploration plays in the Upper Kura Basin, with large potential structures in Cretaceous carbonate reservoirs. In 2005, NSA estimated total unrisked prospective resource potential to be in excess of 680 million barrels within the primary Cretaceous and secondary Miocene (Sarmatian) reservoir targets of the "B" and "C" prospects within the play.

Shale Play Unit/Unconventional Reservoir Studies:

Extensive studies continue across a potentially prospective area associated with the regional Maykop shales within Block 12. As Block 12 is hypothesized to have significant unconventional reservoir potential, study work to further define the play's prospectivity is ongoing and has included analysis of historical databases, extensive new geologic field work and outcrop sampling, as well as associated laboratory analysis. Work will continue into 2014.

Greater Black Sea Strategy:

Frontera continues to work with the State Service For Geology and Mineral Resources of Ukraine to select an area for exploration and production work in the country. Work continues to advance in support of finalizing a new license and establishing an operating presence in the country. Frontera's objective is to build on its extensive regional geologic knowledge and extend into the west through the acquisition of an expanded exploration and production portfolio.

Corporate:

SEDA-backed Loan Agreement

Frontera has entered into a lending facility with YA Global Master SPV Ltd, an investment fund managed by Yorkville Advisors Global LLC, which has the potential to provide up to US$5 million in cash to the Company in support of its ongoing work programs as it enters 2014.

Under the terms of the lending facility, Frontera can receive up to US$5,000,000, which shall be advanced in installments. An initial installment of US$1,500,000 will be advanced in support of ongoing operations, and further installments may be advanced at mutual discretion. The lending facility will be secured by a reserve of shares of the Company's stock that is commensurate with installments distributed under the terms of the facility.

Enquiries:

Frontera Resources Corporation

Liz Williamson

Vice President, Investor Relations and Corporate Communications

(713) 585-3216

lwilliamson@fronteraresources.com

Nominated Adviser and Joint Broker:

finnCap Limited

Matt Goode/Christopher Raggett

+44 (0) 20 7220 0500

Co-Broker:

Cornhill Capital Limited

Nick Bealer / Stefan Olivier

+44 (0)20 7710 9610

Financial PR:

Buchanan

Tim Thompson / Tom Hufton

+44 (0)20 7466 5000

timt@buchanan.uk.com

Notes to Editors:

1. Frontera Resources Corporation is an independent Houston, Texas, U.S.A.-based international oil and gas exploration and production company whose strategy is to identify opportunities and operate in emerging markets in Eastern Europe around the Black Sea. Frontera Resources Corporation shares are traded on the London Stock Exchange, AIM Market - Symbol: FRR. For more information, please visit www.fronteraresources.com.

2. Information on Resource Estimates: The contingent and prospective resources estimates contained in this announcement were determined by the independent consulting firm of Netherland, Sewell & Associates (NSA) in accordance with the definitions and guidelines set forth in the 2007 Petroleum Resources Management System (PRMS) adopted by the Society of Petroleum Engineers (SPE). Gerard Bono, Frontera's Vice President and Chief Reservoir Engineer, who is a member of the SPE, is the qualified person who reviewed and approved the statements in this announcement.

3. This release may contain certain forward-looking statements, including, without limitation, expectations, beliefs, plans and objectives regarding the transactions, work programs and other matters discussed in this release. Exploration for oil is a speculative business that involves a high degree of risk. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are: risks inherent in oil and gas production operations; availability and performance of needed equipment and personnel; the Company's ability to raise capital to fund its exploration and development programs; seismic data; evaluation of logs, cores and other data from wells drilled; inherent uncertainty in estimation of oil and gas resources; fluctuations in oil and gas prices; weather conditions; general economic conditions; the political situation in Georgia and relations with neighboring countries; and other factors listed in Frontera's financial reports, which are available at www.fronteraresources.com. There is no assurance that Frontera's expectations will be realized, and actual results may differ materially from those expressed in the forward-looking statements.